China smartphone shipments slumped in June on inventory overhang: Jefferies
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Sentiment positive but markets lack momentum
* Pound hurt by renewed worries of a hard Brexit
* Oil eases but downside seen limited on output cuts
By Stanley White
TOKYO, Dec 19 (Reuters) - Asian shares pulled back from a
one-and-a-half year peak on Thursday as investors booked profits
ahead of holiday trade and awaited further data on the state of
the global economy.
Investors were also watching proceedings in Washington where
the Democrat-led U.S. House of Representatives voted to impeach
Republican U.S. President Donald Trump for abuse of power and
obstruction of Congress.
Market reaction, however, has so far been limited as the
Republican-controlled Senate is widely expected not to vote to
remove Trump from office. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS briefly touched the highest since June 2018 but
then fell 0.2%.
Australian shares .AXJO erased early gains to trade 0.14%
lower due to declines in the mining sector, while Chinese shares
.CSI300 drifted 0.06% lower.
The pound nursed heavy losses due to concerns Britain could
still crash out of the European Union without a trade deal in
place after a transition period ending in December 2020.
Traders also await a Bank of England (BoE) policy meeting
later Thursday. No change in policy is expected, but the meeting
could pose further downside risks for sterling if more
policymakers swing to the dovish camp and vote for an interest
rate cut.
Overall sentiment was supportive of equities and riskier
assets, but less favourable for safe-haven assets like bonds due
to expectations that economic growth will start to pick up next
year after a tumultuous 2019.
"Data has been generally supportive of an improvement in
economic performance," said Shane Oliver, head of investment
strategy and chief economist at AMP Capital Investors in Sydney.
"Investors can look forward to stronger growth next year,
but a lot of this has already been reflected in share markets."
U.S. stock futures ESc1 edged 0.02% lower in Asia on
Thursday. The S&P 500 .SPX fell 0.04% on Wednesday, weighed by
a steep drop in FedEx Corp FDX.N shares after the U.S. parcel
delivery company cut its fiscal 2020 profit forecast.
Earlier in the session, the S&P 500 hit its fifth
consecutive record high, and analysts said market sentiment
remained largely upbeat following last week's announcement of an
initial U.S.-China trade agreement.
Other analysts pointed to recent data releases showing
economic improvements in China, the United States and Germany as
reasons to be more optimistic.
In the currency market, sterling GBP=D3 traded at $1.3089,
having tumbled more than 3% from an 18-month high struck on Dec.
13 after UK Prime Minister Boris Johnson's Conservative Party
scored a landslide victory in a general election.
Against the euro, the pound EURGBP=D3 stood at 85.03
pence, close to its weakest since Dec. 4.
Johnson's government on Tuesday ruled out an extension to
the December 2020 deadline for negotiations on a trade deal with
the EU, creating a new Brexit cliff-edge and cutting short
sterling's post-election rally. The focus shifts to the BoE's policy meeting later Thursday.
At its previous meeting, two of the central bank's nine
policymakers voted to cut interest rates.
British inflation remained mired at a three-year low in
November, data showed on Wednesday, and uncertainty surrounding
Brexit remains high, but this is unlikely to shift expectations
that monetary policy will remain on hold. The Australian dollar jumped by 0.25% to $0.6872 after
better-than-expected data on the labour market dented
expectations for interest rate cuts. The yen JPY=EBS held steady at 109.58 per dollar ahead of
a Bank of Japan (BOJ) meeting later on Thursday.
The BOJ is widely expected to keep its quantitative easing
in place by may offer a gloomier assessment of factory output.
U.S. crude CLc1 dipped 0.03% to $60.91 a barrel in Asia
after U.S. government data showed a decline in crude
inventories. EIA/S
However, prices are likely to be supported due to production
cuts coming from the Organization of the Petroleum Exporting
Countries and its allies, including Russia.
(Editing by Sam Holmes)